Obama Justice Department’s Liberal Slush Fund Exposed

The Justice Department strong-armed banks for cash – and paid it to the far-left

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To view the complete PDF of the source documents
referenced within this article, please click here.

New internal documents from the Obama Department of Justice (DOJ) reveal the existence of a DOJ “slush fund” used to fund left-wing groups while intentionally excluding conservative organizations.

Despite sworn assertions before Congress by DOJ representatives that the “Department did not want to be in the business of picking and choosing which organization may or may not receive any funding under the agreement,” a series of emails exposes the real intent of DOJ leadership and staff to funnel “money toward an organization of our choosing” using funds obtained via settlement with banks involved in the housing bubble of 2008-2009 [Exhibit A]. Those organizations include left-wing outfits like the Interest on Lawyers’ Trust Account (IOLTA) and Virginians Organized for Interfaith Community Engagement Leaders (VOICE).

DOJ Exhibit A

The emails cite Associate Attorney General Tony West, “who by all accounts was the one person most responsible for including the IOLTA provisions,” as the prime mover in disbursing the slush funds. They also reveal how West’s office specifically sought to incorporate mandatory language into “the Department’s large bank settlement agreements” that required banks to

Critically, this includes cutting out the possibility of funding conservative nonprofits – a point West’s staff was keen to note. Among the list of concerns regarding the agreement language the emails cite “not allowing Citi [Citigroup Inc.] to pick a statewide intermediary like the Pacific Legal Foundation” as a priority because it “does conservative property-rights free legal services.” [Exhibit C]

Tony West doesn’t attempt to conceal his credentials as a Democratic Party operative, and much of his political and legal career reflect his leftist ideology. He served in the Clinton Justice Department and under California Attorney General Bill Lockyer before co-chairing Barack Obama’s 2008 presidential campaign. His Wikipedia entry lists his time after leaving the Obama administration as “focused on promoting an ethical and inclusive culture” as PepsiCo’s executive vice president of government affairs – touting “increased diversity” (read: mandatory ethnic hiring quotas) as a signatory to both the “White House Fair Chance Business Pledge and the White House Equal Pay Pledge.”

Curiously, he is also married to Maya Lakshmi Harris, an adviser to Hillary Clinton’s failed 2016 campaign and the sister of California Senator Kamala Harris.

DOJ Exhibit D

As if the Department’s blatantly ideological bias wasn’t shocking enough, West’s office also encouraged left-wing activists to meet with his staff on March 4, 2014 to “make the case” that the DOJ should make financial donations from companies “mandatory in all future settlements.” In return, Justice Department officials were asked to promise banks “enhanced credit” for the donations [Exhibit I].

“Enhanced credit” means that corporations would get extra credit on government settlements for funneling money to the left-wing groups—for example, $2 for every $1 so transferred. Thus, taxpayers would be cheated even more than in a simple one-for-one transaction.

In effect, West’s office willingly strong-armed private banks into using the DOJ as a pass-through to its left-wing friends. West was so keen to push for the donations that one group sarcastically replied via email that they should

“build a statue [of Tony West] and then… bow down to this statue each day after we get our $200,000+.”

DOJ Exhibit C

Americans for Limited Government, a watchdog, released a statement on release of the documents:

Judiciary Committee Chairman Goodlatte was right when he sought to defund these third-party settlements, which were nothing more than political payola to radical, left-wing groups. The insidiousness of this scheme to turn mortgage bank settlements into multi-million-dollar payouts to support left-wing politics, is that it just hasn’t occurred out of the Justice Department.

Through sue-and-settle and various federal government grants, the taxpayers are amongst the largest sugar daddies for far-left causes.

DOJ Exhibit I

The scheme is part of a broader effort by the Obama administration from 2009 to 2015 to redirect $37.3 billion from a number of big banks to help Democrats and liberal groups. The plan is exposed in a 2016 report by the nonpartisan Government Accountability Institute (read it here).

Billions of dollars extracted under threat of federal lawsuit from banks was moved through groups like NeighborWorks, which in turn funded groups such as the Neighborhood Assistance Corp. of America (NACA). NACA’s leader, Bruce Marks, is a self-styled “bank terrorist.” He’s also the recipient of over $53 million in forced donations from the big bank settlements. The funds eventually reached groups such as the racist National Council of La Raza (“the race”), the National Urban League, and Asian Americans for Equality (AAFE)—a group “with communist roots” and close connections to “a very vocal North Korean sympathizer.”

Many of these groups have close ties with the Democratic Party. The National Council of La Raza (today UnidosUS), George Soros’s Open Society Foundations, and other extremist nonprofits are major supporters of CASA de Maryland, an illegal immigrant advocacy group whose former president and board included longtime radical activist Tom Perez. Perez—who was rumored to be near the top of Hillary Clinton’s list of vice presidential picks in the 2016 election—was elected to head the Democratic Party in February 2017, where he has fomented an anti-conservative “resistance” by tacitly encouraging violence by groups like Black Lives Matter and Antifa.

Although the story is still developing, it already bears an uncanny resemblance to the Obama IRS scandal of 2010, when the Internal Revenue Service’s Exempt Organizations Unit—headed by Lois Lerner—targeted the tax-exempt status applications of conservative organizations, particularly Tea Party affiliates. Many groups were unable to obtain nonprofit status thanks to the IRS’s ideologically motivated scrutiny, crippling conservative activism in the 2012 presidential election.

See CRC’s March 2016 Organization Trends and Jacob Grandstaff’s post on the Justice Department’s refusal to pursue charges against Lois Lerner.

To view the complete PDF of the source documents referenced within this article, please click here.

Hayden Ludwig

Hayden Ludwig is a Research Analyst at Capital Research Center. He is a native of Orange County, California, and a graduate of Sonoma State University.

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Capital Research Center (CRC) was established in 1984 to promote a better understanding of charity and philanthropy. We support the principles of individual liberty, a free market economy and limited constitutional government: These are the cornerstones of American society.